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Ceres operates bus lines throughout the Philippines, often providing transportation services on behalf of local transit authorities. Several of Ceres' buses are nearing the end

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Ceres operates bus lines throughout the Philippines, often providing transportation services on behalf of local transit authorities. Several of Ceres' buses are nearing the end of their useful lives and are requiring increased operating and maintenance costs. Customers have also complained that the buses lack adequate storage, flexible seating configurations, and newer amenities such as wireless Internet access. The firm has made a commitment to act in an environmentally responsible manner and will only pursue projects that do minimal harm to the ecosystem. Accordingly, Ceres' managers decide to look for replacement buses that generate low emissions. In the information-gathering stage, the company learns that as early as 2021, it could feasibly begin purchasing and using diesel electric hybrid buses that have Wi-Fi and also offer greater comfort and storage. Assume that the expected additional operating cash inflows are P240,000 in years 1 through 4 and P210,000 in year 5. Old bus New Hybrid Bus Purchase price P660,000 Current book value P60,000 Current disposal value 28,500 Not applicable Terminal disposal value five years from now 0 0 Annual depreciation 12,000 132,000 Working capital required 6,000 36,000 a. The old bus has a 5-year useful life and has no terminal disposal value. b. Ceres uses an 8% required rate of return for discounting after-tax cash flows. c. Year 5 cash inflows are P240,000, which includes a P30,000 recovery of working capital. As the management accountant, you are responsible for preparing a capital budgeting report to be presented "to management for decision-making. You are tasked with calculating the following values: 1. Net present value 2. Internal rate of return 3. Payback period 4. Accounting rate of return on net initial investment Answer with text and/or attachments

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